Hiring Challenges: The Future Of Skilled Labor

Thoughtful operational adjustments guided by proven strategies can help your company hire and retain skilled labor.

By Kirsten Tornow

Small business leaders that rely on skilled labor are facing unprecedented challenges in today’s job market. With job growth for businesses with fewer than 50 employees steadily declining after 2022’s sustained highs, and concerns about supply chains, inflation, and shallow labor pools at top of mind, many business leaders are understandably uncertain about the steps they should take to weather the storm.

A recent Paychex survey found that 80% of skilled trades leaders are at least somewhat stressed at work, while over half report this stress affects their sleep (56%) and their ability to spend time with their families (53%). About one-third also noted decreased work/life balance (35%) and negative impacts on their mental health (31%).

Skilled Labor
(Photo: Adobe Stock / Kzenon)


The challenges today’s managers face, while unique in their specifics, are not uncommon. Countless organizations and sectors have faced similar obstacles and successfully overcome them. All it takes are thoughtful operational adjustments guided by proven strategies:

• Invest in current employees. The oft-cited American labor shortage seems to be waning across sectors and hiring managers are finally seeing candidate pools return to pre-pandemic norms. From technology to hospitality and beyond, hiring managers are seeing a light at the end of the tunnel—but the same cannot be said for businesses seeking skilled laborers.

A recent Paychex survey focused on the top priorities for skilled trades leaders in 2023 found that nearly half (47%) of respondents think the labor crisis will be one of the biggest challenges they face this year. Similarly, 42% of leaders surveyed for a 2022 National Fire Protection Association (NFPA) report said the bulk of their 2023 budgets would go toward overcoming staffing challenges.

One reason the situation seems so daunting is the focus on hiring rather than retention. Leaders that have been pouring significant resources into filling gaps by bringing on new people should consider redirecting that money toward initiatives that encourage talented workers to stay. Putting money toward training and education offerings, thoughtful wage increases, and improved benefits can be a more effective way to maintain headcount as these initiatives can help reduce turnover, build the company’s skill base, and develop leaders from within.


Leaders that have been
pouring significant resources
into filling gaps by bringing on
new people should consider
that money
toward initiatives that encourage
talented workers to stay.


Additional tactics such as rewarding top performers, recognizing teamwork, and having open communication with employees about company goals and progress on a regular basis can help to improve and increase overall employee engagement, resulting in higher employee retention.

• Listen to your people. When leaders are worried about budgets and staffing, the natural response is to find ways to cut back. That’s all well and good but doing so effectively relies on understanding the difference between cutting back and cutting corners.

A good way to do the former without doing the latter is to solicit feedback from employees and invest in the efficiencies they think will help them. The fact is that employees know what they need and what they don’t. Listening to their ideas for operational improvements and letting that feedback guide your decisions can ensure that you’re investing in things that will actually help and maintaining investments that work.

Furthermore, encouraging feedback can boost engagement and help employees feel valued, which supports retention efforts and staffing success.

• Turn to technology. Hiring is just one part of running a business, but in the current climate, it’s taking up a lot of leaders’ time and attention. In the Paychex survey mentioned above, one-third of respondents cited the time commitment that comes with HR administration as a top challenge for the year. Furthermore, the study found that the estimated annual cost associated with having employees work on HR tasks is nearly $135,000—or $2,594 each week.

Investing in technology that streamlines these processes through automation can reduce the amount of time skilled laborers spend doing administrative work so they can get back to using their expertise to serve customers. Leadership teams tend to see similar benefits as HR administration can eat into their time as well. Nearly half (48%) of leaders in the Paychex survey shared that they spend more than 10 hours working on HR each week. Automating some of these processes can help them refocus their efforts on big ideas that push the business forward.

Investments in on-the-job tools can also help. NFPA’s survey of skilled laborers found that 68% of respondents want to work with companies that invest in innovative tools for jobsites. Forty percent of respondents thought the biggest opportunity for technology to improve their day-to-day work onsite would be for ease of communication between team members.

• Embrace outside help. Working with a professional employer organization (PEO), for example, can help lighten the load so leaders can make these adjustments with confidence—and without adding more work to their already-overloaded plates.

PEOs can offer an objective point of view informed by experience helping other companies overcome similar challenges. They can also help leaders keep up with changing regulations, identify opportunities for technological interventions, and weigh strategic solutions to difficult problems as well as support administrative tasks to free up managers to focus on the business objectives that matter to them.

Passion And Perspective

We think the key to success in all of the above is to maintain perspective, knowing that the hard times are likely to pass. Leaders in skilled trades tend to be in the business because they enjoy it and are passionate about the work they do. In fact, the overwhelming majority (87%) of these leaders say they wouldn’t change their decision to work in the field, noting that they would still advise their younger self to run or work in a small or mid-sized skilled trades business. It’s this mission-guided approach that will keep leaders on course despite the challenges the industry faces, motivating them to try new strategies that support ongoing success.

Kirsten Tornow is a HR Coach at Paychex.

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